The impact of a revolutionary climate change judgment on companies worldwide

International

Introduction: revolutionary judgment for multinationals in all sectors

Last week a revolutionary climate change judgment was rendered with potentially great impact on companies worldwide, especially on their environmental footprint policy. In a judgment against Royal Dutch Shell (RDS) dated 26 May 2021, for the first time in history, a court has handed down a judgment that holds a multinational company directly responsible for climate change on the basis of a duty of care following from international treaties such as the UN Guiding Principles and Paris Climate Agreement. RDS has the obligation to reduce its group's CO2 emissions with 45% to meet their reduction goals to prevent climate change. Notwithstanding any possible appeal, with the foundation of this judgment being in international treaties, this judgment is anticipated to be a further catalyst for the current and future wave of climate change litigation against multinational companies in the Netherlands and most likely also in other jurisdictions.

This judgment does not only affect the oil and gas industry, but also other companies in their production or logistic processes. The claim foundation involved, Milieudefensie, already announced actions against Dutch companies in other sectors, such as steel producers, dairy companies and the beef industry.

Click here to read more.